France

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Full Report: France

Overview

1910-1913: Tensions within Europe mount in the years leading to World War I. Against a backdrop of growing nationalism, France and other European powers engage in commercial, political, and colonial rivalries.

1914-1918: France joins England and Russia in the war against Germany and the Austro-Hungarian empire. The allies emerge victorious, but France suffers a heavy physical and financial blow. The war brings together political parties in defense of France. President Raymond Poincaré appoints the Radical Republican Georges Clemenceau, the "father of victory," as prime minister.

1919-1928: After obtaining heavy German reparations, France builds a more peaceful relationship with its neighbor. The government plays a major role in the struggle to rebuild the war-ravaged economy, nationalizing many state industries. Labor unrest and massive strikes are common. Conservative coalitions dominate political life until an alliance of Socialists and Radicals takes power in 1925 for three years.

1929-1935: Conservative coalitions return to power against a backdrop of rising fascism in Italy and Nazism in Germany. Socialists, Radicals, and Communists ally as the Popular Front in response to the rise of nationalist and extreme right-wing movements. With a stable franc and a large agricultural sector, France weathers the Depression better than its neighbors, from whom it receives a wave of immigrants.

1936-1939: The pendulum swings to the left, and France is briefly headed by a Popular Front government under Léon Blum. He must, however, contend with internal divisions and financial failure. Blum's main legacy is a series of labor reforms. In 1939, France, unable to avoid hostilities with Germany, enters World War II.

1940-1944: German invasion partitions France into an occupied zone and a zone governed by Marshal Pétain's Vichy regime. The latter collaborates with Nazi Germany in plundering France's resources and deporting Jews. Trade and the economy come to a standstill. The Allies finally land in Normandy in June 1944 and liberate France with help from General Charles de Gaulle's Resistance movement.

1945-1947: De Gaulle heads a provisional government at the beginning of the Fourth Republic, then resigns because of internal divisions. He forms a new party, the Rally of the French People (RPF). France must once again rebuild its economy. The state nationalizes the banking, electricity, gas, and coal sectors as well as companies that consorted with Vichy. France's colonies clamor for independence.

1948-1958: U.S. aid and a national plan bolster economic growth. France, though, remains politically unstable, with a rapid succession of ineffective governments. After French defeat in Indochina and bitter armed conflict in Algeria, a revolt in Paris overthrows the Fourth Republic. De Gaulle returns to become president with wide executive powers under a new constitution in 1958.

1959-1964: France dominates the newly formed European Economic Community. Growing inequalities and rising discontent accompany its strong economic performance. France seeks to protect its interests by becoming an independent military and nuclear power. De Gaulle promotes Franco-German cooperation and large-scale, high-tech economic projects. France's colonies in North and West Africa gain independence.

1965-1974: De Gaulle narrowly defeats his left-wing opponent in presidential elections. He continues an independent approach to foreign policy. Rising inequalities and the government's paternalistic attitude spark a violent, nationwide student and labor uprising in May 1968. De Gaulle resigns, and Prime Minister Georges Pompidou takes over the presidency while the Socialist Party builds strength.

1975-1980: Valéry Giscard d'Estaing, leader of the center-right Independent Republicans, is elected president. "Thirty Glorious Years" of postwar economic growth come to an end with successive oil shocks, a growing trade deficit, and unemployment. Unpopular austerity measures fail to redress the economy.

1981-1982: A strong left elects Socialist Party leader François Mitterrand president. His predominantly Socialist government implements a sweeping program of reform, decentralizing government, nationalizing large industries, banks and insurance companies, and raising wages and social security benefits. But the resulting increase in public spending further hurts the economy.

1983-1988: Economic policy takes a U-turn as Mitterrand abandons protectionist measures for state-led growth. Communists in the government resign. The right wins 1986 parliamentary elections, and Mitterrand names opposition leader Jacques Chirac as prime minister, ushering in a phase of "cohabitation" governments. Chirac completes the economic policy shift with a denationalization and deregulation program.

1989-1993: High unemployment, the rise of the extreme-right National Front, and tight immigration policies fuel racial tensions. France enters the Gulf War and suffers from the worldwide recession. Mitterrand's popularity plummets, and in 1993 he appoints Édouard Balladur of the opposition Rally of the French People (RPF) as prime minister.

1994-1996: The new European Single Market and a privatization program help the economy register moderate growth. Prime Minister Balladur resigns when he is implicated in one of a series of political scandals. Paris is rocked by a rash of terrorist bombings believed to be the work of Algerian Islamic fundamentalists. Chirac, running as the "man of the people," is elected president.

1997-2001: The government loses support when President Chirac launches nuclear tests in the Pacific and Socialist Prime Minister Lionel Jospin fails to live up to campaign promises made to labor. Political scandals further undermine the government, setting the stage for a turbulent run up to the 2002 presidential elections. Economic growth remains moderate, but stronger than that of most European nations.

2002: After extreme rightist Jean-Marie Le Pen earns a runoff spot in the 2002 election, President Chirac wins reelection when all mainstream parties unite around him. The left is routed in parliamentary elections. The conservative government stays the course, as France is the best performing of the larger European economies. The government proposes greater decentralization of power to the regions.

2003: President Chirac strongly opposes the war in Iraq and demands a central role for the United Nations in Iraq after the military conflict. Relations with the U.S. and UK are tense. A sluggish economy, ballooning budget deficit, and rising unemployment weigh heavily on the domestic agenda. A controversial initiative to reform the country's pension system causes mass strikes.

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Political

1919-1924: France has a parliamentary government under the republican constitution of 1875. Inspired by the Russian Revolution, the French Communist Party grows, while the Socialists and Radicals unite. In 1922 the conservative Raymond Poincaré replaces Georges Clemenceau as prime minister, but his coalition disintegrates when France invades the Ruhr after Germany defaults on its WWI reparation payments.

1925-1928: Under the more conciliatory leadership of Radical Prime Minister Édouard Herriot, relations with Germany improve. Europe's leading powers sign a series of treaties and agreements in Locarno, Switzerland, which symbolize hopes for an era of international peace. Herriot resigns after a financial controversy, and Raymond Poincaré returns as prime minister, strengthening the power of the right.

1929-1935: The Depression takes hold, and 1932 elections unseat Poincaré's conservative successors. The next 16 months see a series of ineffective coalition governments. The Popular Front, a leftist alliance against rising fascism, takes its first tentative steps. The Radical Édouard Daladier forms a new government, but must resign after a financial and political scandal.

1936-1939: The reunited left wins the 1936 parliamentary elections, and Léon Blum heads a Popular Front government. Internal divisions and conservative opposition to his fiscal measures lead him to resign and the Front to lose strength, but not before preventing the rise of fascism in France. Daladier returns as prime minister, and in 1939 he reluctantly commits France to World War II beside the British.

1940-1943: German invasion ends the Third Republic. France is divided into two zones, one occupied and the other governed by Marshal Pétain, a French WWI hero who sets up a new regime based in Vichy. The authoritarian Vichy government collaborates with the Nazis in plundering resources and deporting Jews. From London, General Charles de Gaulle calls for a French Resistance movement which fast gains strength.

1944-1945: The Allies land in Normandy and liberate France with assistance from the Resistance movement. De Gaulle becomes head of a provisional government of centrists, Communists, and Socialists. France's colonies in North Africa, West Africa, and East Asia demand greater autonomy.

1946-1947: De Gaulle resigns because of internal divisions in his government and forms a new political party, the Rally of the French People (RPF). The Fourth Republic is proclaimed, with a new constitution that again provides for a weak executive and a powerful national assembly. A series of impermanent governments are unable to stem inflation or the political and social unrest in the colony of Indochina.

1948-1954: Socialists fail to bring stability and lose strength as a party. France joins NATO as a founding member and opts for a policy of entente with West Germany, setting the stage for the European Community. De Gaulle loses support and resigns as party leader. France invests in its colonies to prepare them for independence. The French are forced out of Indochina after their defeat at Dien Bien Phu.

1955-1958: Conflict between nationalists and the French army in Algeria contrasts with the peaceful decolonization of Morocco and Tunisia. A revolt in Paris overthrows the Fourth Republic. A new constitution establishes the Fifth Republic, subordinating the legislature to the presidency. De Gaulle becomes president. Socialists split over support for the Fifth Republic and make several unsuccessful alliances.

1959-1964: France moves toward military and nuclear independence. De Gaulle promotes Franco-German cooperation while remaining friendly with Britain and the U.S. He grants Algeria independence in 1962, incurring criticism from settlers and French officers. Still, his supporters win a majority in the 1962 elections. Several sub-Saharan African colonies transition more smoothly to independence.

1965-1968: De Gaulle narrowly defeats left-wing opponent François Mitterrand under a new system of presidential election by direct universal suffrage. De Gaulle continues an independent approach to foreign policy, withdrawing France from NATO commands and testing a hydrogen bomb. The government's paternalistic approach to domestic affairs sparks a student revolt and massive strikes in May 1968.

1969-1974: The Socialists reorganize as the Parti Socialiste (PS) at a congress. De Gaulle resigns from a shaken government and former Prime Minister Georges Pompidou is elected president. Pompidou maintains some Gaullist principles in foreign policy but is generally more conciliatory. Mitterrand and his allies begin to transform the left, building a strong PS. Pompidou dies in office in 1974.

1975-1980: Valéry Giscard d'Estaing, leader of the center-right Independent Republicans and a former finance minister, is elected president. He implements conservative domestic policies and insists on the primacy of French interests and nuclear weapons. Economic crisis undermines his government. The PS and the Communist Party (PCF) forge an electoral alliance.

1981-1982: The united left elects PS leader Mitterrand president, and the Socialists sweep subsequent parliamentary elections. Although dominated by the PS, the government also includes four communist ministers. The administration introduces a far-reaching program of social reform, decentralization, and nationalization.

1983-1985: President Mitterrand appoints Laurent Fabius of the PS as prime minister. Communist members of the cabinet resign, opposed to a drastic PS economic policy shift and increased reliance on markets. In 1984 Mitterrand forms a new government excluding the Communists.

1986-1988: The right-wing RPF and Union for French Democracy (UDF) win a parliamentary majority. Mitterrand appoints opposition leader Jacques Chirac as prime minister, resulting in the first government "cohabitation," which ends 30 years of president and prime minister being drawn from the same coalition. Chirac's policies anger students and workers; Mitterrand defeats him in the 1988 presidential election.

1989-1992: The extreme right National Front does well in municipal elections, pressuring the government into adopting a hard line against illegal immigration. Mitterrand replaces Socialist Prime Minister Michel Rocard with Edith Cresson after they clash on economic policy. But economic recession and political scandal cause Cresson's popularity to plummet, pulling Mitterrand's down as well.

1993-1995: The Parti Socialiste loses the national assembly elections. Mitterrand appoints the RPF's Édouard Balladur as prime minister of his second "cohabitation" government. Balladur resigns in the wake of corruption scandals. With Mitterrand's health declining, Chirac runs for president as the "man of the people" and is elected in 1955. Former Foreign Minister Alain Juppé becomes prime minister.

1996-1997: Chirac loses support after a nuclear testing debacle in the Pacific. He calls for general elections a year early so the government can continue the austerity measures designed for membership in the European Monetary Union. His plan backfires when the Socialists, opposed to the measures, win and Lionel Jospin becomes prime minister. "Cohabitation" governments become the norm, not the exception.

1998-2000: Labor criticizes Jospin for retreating from campaign promises. In regional elections, the ruling Socialist, Green, and Communist coalition wins 37 percent of the vote, the mainstream right 36 percent. The National Front splits in two. Political scandals undermine government in general. A constitutional referendum reduces the presidential term from seven to five years, equal that the parliament's.

2001-2002: The left wins Paris city council, but the right strengthens elsewhere. Scattered leftist votes in the 2002 presidential election puts extreme rightist Jean-Marie Le Pen in second place; all mainstream parties rally around President Chirac in the runoff. A pro-Chirac conservative coalition wins parliamentary elections, ending five years of "cohabitation." Jean-Pierre Raffarin becomes prime minister.

2003: Backed by majority support, President Chirac voices strong opposition to the U.S.-led war in Iraq. When the three-week military campaign proves not to be the long struggle he had predicted, Chirac faces a possible loss of credibility at home. Relations with Britain are tense after a split over the Iraq war. France calls for a central role for the United Nations in the new administration of Iraq.

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Economic

1919-1928: Ravaged by the war, France struggles to rebuild its economy. The loss of foreign investment and indebtedness to the United States for war loans have weakened the franc. In an effort to protect and expand French interests, the government nationalizes some industries, including the state oil company. By the late '20s, a stabilized franc helps put the economy back on its feet.

1929-1935: While industrial production slumps, France's economy withstands the 1929 crash better than other European countries, largely because it is more domestically than internationally oriented. A high percentage of the population still engages in small-scale agriculture, and France does not depend heavily on the trade of mass-produced goods. France is able to extend a large loan to the Bank of England.

1936-1944: The government nationalizes the railroads. World War II destroys the infrastructure and 50,000 factories. Germany appropriates half of France's public-sector revenue. The Vichy government forms "Organizing Committees" for each economic sector in a move toward a coordinated economy and away from the free market. France emerges from the war economically weak.

1945-1949: France nationalizes the banking, electricity, gas, and coal sectors, as well as companies that consorted with Vichy. Banker Jean Monnet develops output and modernization goals for key economic sectors. Under "indicative planning," details of the Monnet plan in each sector are left to committees represented by the Planning Commission, major firms, public enterprises, unions, and technical experts.

1950-1957: U.S. aid flows through the Marshall Plan and, combined with the national plan and worldwide prosperity, brings an economic boom and annual growth of 5 percent. France invests heavily in infrastructure and in 1957 plays an active role in setting up the European Economic Community (EEC), or Common Market, an expansion of the 1950 European Coal and Steel Community.

1958-1960: France's aggressive investment program contributes to inflation. War in Algeria leads to heavy expenses and labor shortages. Industrial output slows. After the Franco-British operation to retake the Suez Canal, Middle Eastern countries refuse to supply oil to France, which must turn to more expensive sources. The franc is devalued.

1961-1968: The economy regains strength, and France, closely followed by Germany, begins to dominate the EEC, vetoing Britain's application to join in 1963. The government implements an industrial policy that promotes large-scale economic projects in the fields of high-tech aeronautics, information technology, and telecommunications. The French economy outperforms those of Britain and Germany.

1969-1973: Investment in equipment modernization pays off: France undergoes an agricultural boom and becomes the world's second agricultural exporter after the United States. The sixth economic plan pushes massive investment in nuclear power, telecommunications, and information technology. France achieves economic growth of 5.8 percent per year until the oil shock of 1973.

1974-1980: The 30-year postwar boom known as the "Trente glorieuses" ("Thirty Glorious Years") comes to an end as France enters a prolonged economic crisis. Growth slows, becoming negative in 1975. President Giscard d'Estaing imposes unpopular austerity measures to stem rising inflation and unemployment. A major nuclear power program is designed to save on energy imports.

1981-1982: The government introduces radical reform, nationalizing banks, insurance companies, and many large industries, including steel, nuclear energy, and armaments. President Mitterrand's administration also increases minimum wage and social security benefits. Increases in social spending and growing losses at nationalized companies strain the government's finances, and the economic situation worsens.

1983-1985: Finance Minister Delors and Prime Minister Mauroy engineer a U-turn in economic policy to address the economic crisis. They reject protectionism and uncontrolled public spending in favor of austerity and increased productivity, and take a hard line against the traditional policy of bailing out troubled companies. The socialist program ends as Keynesian principles give way to more monetarist ones.

1986-1992: Prime Minister Chirac introduces a radical program of denationalization and deregulation. His reforms bring an upturn in macroeconomic performance, but they encounter serious opposition from striking workers. In 1991 France is caught up in the world recession in the wake of the Gulf War.

1993-1995: European economic integration in the form of the Single Market forces French businesses to become more competitive. The government launches a new program to privatize major concerns in the industrial sector (such as Péchiney and Elf Aquitaine) as well as the insurance and banking sectors (such as Banque Nationale de Paris). The economy registers moderate growth.

1996-2003: The state reduces its role in the economy but remains the leading employer, producer, and customer. Privatized firms emerge as major domestic and international players. Economic growth picks up and reaches 3.6 percent in 2000, driven chiefly by strong domestic demand. Growth is greatest in the financial services sector. France's more flexible economy now outpaces that of Germany as "motor of Europe."

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Social

1919-1925: Labor unrest mounts in the postwar years. Depletion of capital inhibits adequate job creation for returning servicemen. The government passes laws permitting collective bargaining and instituting the eight-hour day and six-day week. Nevertheless, the General Confederation of Labor (CGT) calls for hundreds of strikes to protest low wages and high prices.

1926-1933: With the birth rate declining, population growth is sustained primarily by immigration from Spain and Portugal. Most immigrants to France are young men, which compensates for military losses of the war. France replaces the United States as the greatest destination for European immigrants.

1934-1939: Labor stages a number of major strikes, occupying factories across the country. Blum's government implements several reforms, including the 40-hour work week and paid holidays, as the result of the Matignon agreement between employers and labor. In 1938, however, Daladier's government reinstates the 48-hour work week and sides with employers in a move the Popular Front calls a "bosses' revenge."

1940-1944: The Nazi invasion forces millions to flee their homes and travel long distances across France. They live in miserable conditions, and many suffer from malnutrition as the Vichy government sets weekly rations. Tens of thousands are executed, deported to concentration camps, or put into forced labor in Germany. By the end of the war, Paris is physically undamaged, but many other cities are in ruins.

1945-1950: Peace restores confidence in the future despite initial economic hardship, as the postwar "baby boom" bears witness. The government sets up a social security system that forms the basis for France's extensive welfare system. But poor harvests force the government to lower rations again. The return of more than one million prisoners of war aggravates an existing homelessness crisis.

1951-1958: The government agrees to union demands for a minimum wage. Quality of life improves with economic growth. Housing construction takes off. The traditional rural base declines as growth focuses on industry. A rise in car ownership brings with it suburban development. The late '50s see a renewed influx of immigrants, especially from Italy, Spain, Portugal, and North Africa.

1959-1967: France's rapid economic growth brings with it rising inequalities. More than 45 percent of the country's wealth lies in the hands of 5 percent of the population. The gradually younger population uses the media to help broadcast and garner support for their social aspirations and demands for equality across the nation.

1968: A student revolt against poor university conditions becomes a forum for society to air its grievances. Workers join the movement, which spreads throughout France as an open and violent rebellion against the established order. Divisions within the protest movement and fear among trade union leaders of events escalating beyond their control enable authorities to curb the movement within a month.

1969-1975: Prime Minister Chaban-Delmas's "new society" brings significant social progress. It includes legislation on vocational training and welfare coverage for the poor and elderly. France consolidates its profile as a welfare state. Regulated increases in the minimum wage prevent greater wage disparities. Women's rights are expanded, and the 1975 Abortion Law legalizes abortion in certain circumstances.

1976-1981: President Giscard d'Estaing seeks to improve conditions for women through laws that make it easier to obtain divorce and abortion. He lowers the minimum voting age from 21 to 18, relaxes censorship, and reforms the education system. The economic crisis combined with baby boomers entering the labor market generates a swift rise in unemployment, helping the Socialists return to power.

1982-1988: The new government starts a radical program of social reform. The work week is cut by an hour and paid vacations are extended from four to five weeks. But a program of public spending, nationalization, and increased taxes on high incomes soon gives way to more austere policies. Unemployment rises, intensifying racial tensions in urban areas.

1989-1994: Prime Minister Rocard implements a progressive program aimed at protecting immigrants and the unemployed, but some of his measures are cut short when he is replaced by Edith Cresson. By 1993, unemployment reaches 10 percent. Tight immigration policies influenced by the extreme-right National Front fuel religious and cultural tensions.

1995-1997: President Chirac fails to deliver on his promise to reduce unemployment and end social divisions. Public-sector strikes remain frequent, and in 1995 postal and utilities employees join public transport workers in a nationwide strike which brings the country to a virtual standstill. University students strike to demand more teachers and resources. Unemployment reaches 12.8 percent.

1998-2003: Legislation in 1998 expands the legal status of same- or opposite-sex unmarried couples. A 2000 law reduces the work week from 39 hours to 35 hours without a reduction in pay to promote job creation. Economic growth and a drop in unemployment help mute the initial opposition from employers. Immigration and an aging population maintain pressure on the social welfare system.

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Environmental

1919-1959: France focuses on rebuilding its cities, industry, and infrastructure in the wake of the two world wars. Economic development, increased agricultural production, and industrial output take precedence over any concern for resource use or environmental damage.

1960-1970: France develops nuclear weapons, triggering controversial tests in the Algerian Sahara desert and the Pacific islands. Nascent concern for natural resource preservation prompts a law establishing national parks. Responding to rapid industrialization, the government passes a water law that includes financial incentives based on the "polluter pays" principle. Enforcement, however, is uncoordinated.

1971-1980: France establishes the Ministry of the Environment to coordinate the work of other ministries. The first environmental community action program surfaces in 1973. France's nuclear energy program, developed for energy independence, becomes a critical component of its environmental protection efforts. France participates in several international conventions on cross-border air and water pollution.

1981-1985: A 1983 law decentralizing responsibility for town planning gives local authorities responsibility for the supply of drinking water, sewage treatment, and land use. The Green movement starts campaigning as a political party. In 1985 French secret service agents sink a Greenpeace ship in New Zealand protesting nuclear testing. The scandal heightens public awareness of environmental issues in France.

1986-1990: The Greens become the fourth political force in France. As part of an international effort, France sets up an inter-ministerial mission to examine the greenhouse effect. An energy policy based on a large-scale nuclear power program enables France to reduce its carbon dioxide emissions drastically. In 1990 the government approves a national plan for the environment.

1991-1997: With the establishment of 26 regional environmental boards, local authorities are responsible for the bulk of public spending on the environment. Several laws are revised to reinforce the role of local authorities. The government establishes an inter-ministerial committee for the environment to promote environmental protection policies within all central government agencies.

1998-2003: France suffers two environmental blows. In December 1999 an oil tanker sinks off the Brittany coast, spilling 90,000 barrels of heavy oil. Environmental damage from the spill is exacerbated by a series of storms that rip through France, destroying 300 million trees and causing major damage to the electricity transmission system. More oil slicks hit in 2002.

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Rule of Law

1919-1924: During the postwar period, laborers stage hundreds of strikes, particularly in 1919 and 1920, protesting low wages and high prices. Many of these demonstrations turn violent, with clashes between protesters and police forces.

1925-1935: Hard times and inefficient government increase resentment among ordinary citizens, some of whom turn toward fascism. France puts down a revolt in Morocco and jails communist militants who oppose France's policies in its colonies. In 1934 a financial and political scandal involving the sale of worthless bonds discredits the Radical Socialist Party and parliamentary democracy in general.

1936-1939: The right's rise brings religious violence. The right attacks Léon Blum as a Jew and attempts to assassinate him. Blum's announcement of a pause in social reform causes violent demonstrations in which several Socialists are killed and more than 200 are wounded. A year later, a general strike in protest of the expanded work week leads to severe repression as activists are systematically put down.

1940-1944: German occupation and cooperation by the authoritarian Vichy government bring a period of repression and discrimination. The Vichy regime works with Nazi Germany to hunt down and deport Jews. Political parties are abolished; the leaders of the Popular Front are arrested; political meetings and strikes are prohibited. Food rationing triggers the rise of a black market.

1945-1955: Angry and spontaneous acts of revenge over those who cooperated with the Germans give way to an official government purge of collaborators. De Gaulle is determined to carry out the purge legally, and hundreds of court proceedings follow. Vichy's Marshal Pétain is sentenced to life imprisonment.

1956-1962: The Algerian National Liberation Front launches a terrorism campaign in Algeria; the French army responds with torture. Enraged French intellectuals publish books and articles detailing the use of torture. The government's attempted cover-up causes a public uproar. De Gaulle narrowly survives several assassination attempts. Colonial-rule extremists carry out terrorist acts in Algeria and France.

1963-1975: The public learns the government has tried to hide to scope of a violent crackdown on Algerians in Paris during a protest in 1961. Disenchantment with the government comes to a head in a May 1968 upheaval begun by students and joined by workers across the country. The police erect barricades and respond to student attacks with violence.

1976-1986: Separatists on the Mediterranean island of Corsica begin a string of bombings. In Paris, a series of explosions is linked to a Lebanese terrorist group. A violent anarchist group, Action Directe, contributes to the climate of terror. France creates an anti-terrorism office, expanding the powers of magistrates to hold terrorism suspects without charge.

1987-1994: Several corruption scandals come to light as France's magistrates unearth evidence of illegal fundraising during the Cold War era, often organized nationally via fictitious holding companies. Dozens of businessmen and politicians are placed under formal investigation as investigating magistrates delve deeper into political schemes over time.

1995-1996: Algerian-based Islamic fundamentalists are believed to be responsible for a bombing campaign carried out primarily on Paris commuter trains. France implements a joint military operation known as Vigipirate designed to meet the security threat. While having little effect on terrorism, the plan does reduce the crime rate.

1997-1998: French authorities bring more than 100 terrorists to justice for past acts of violence, but controversy over allegations of racism in the mass trial leads to minimal sentencing. Chirac is linked to public contract manipulation and illegal use of publicly owned buildings during his term as mayor of Paris. An intense investigation of corruption charges among prominent political figures begins.

1999-2003: Finance Minister Dominique Strauss Kahn steps down in the wake of corruption allegations of which he is later cleared. Constitutional Council head Roland Dumas is jailed on corruption charges along with two top executives of the oil company Elf Aquitaine; he is eventually cleared. Despite growing judicial independence, top politicians are still often seen as immune to prosecution.

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Trade Policy

1919-1928: France focuses on rebuilding its economy in the wake of World War I. Trade policy is largely protectionist. Exports are primarily of luxury goods, although poor harvests hamper wine production. With a weakening currency, France cannot afford many imports.

1929-1935: In the wake of the Depression, France maintains the gold standard. As other currencies decline in value relative to the franc, French exports become more expensive. Exports fall to less than two-thirds of imports. A reluctance to borrow to modernize equipment means an inefficient agricultural sector and increased agricultural imports.

1936-1939: France abandons the gold standard. A devaluation of the franc helps increase exports. The structure of exports shifts from light toward heavy industry and agricultural products, sold primarily to Western and Central Europe. The United States supplies imports of raw materials. France also trades heavily with its colonies, importing raw materials and exporting manufactured goods.

1940-1944: Trade collapses under the German occupation and the Vichy regime. Germany requisitions most of France's resources. Agricultural production is disrupted as young men go to war and fighting spreads throughout the country. The American and British markets are closed off.

1945-1948: Physical damage forces France to cast aside its traditional protectionist attitudes. Transportation networks and ships must be rebuilt. Poor harvests aggravate already low production on mine-infested agricultural land. France must import bulky coal, grain, and feed with high shipping costs, and imports rise to five times the level of exports. Loans finance the trade deficit.

1949-1957: With the passage of the General Agreement on Tariffs and Trade in 1948, France removes quantitative restrictions on half of its private trade with other European countries, despite strong resistance from groups that benefit from protectionism. Loans and a reduction in coal shortages and other industrial bottlenecks enable an increase in exports, which benefit from specific credits and subsidies.

1958-1961: The Treaty of Rome establishes the European Economic Community. Member states establish a common integrated tariff system. Duties are applied to non-EEC countries' imports. The franc's devaluation helps exports increase greatly. France must turn to expensive oil supplies, in part from Venezuela, when the Middle East refuses to supply oil after the Franco-British attempt to retake the Suez Canal.

1962-1969: Membership in the EEC and rapid decolonization change the pattern of trade. The EEC's industrialized nations provide a large market for France's agricultural products. By 1969, France provides 42 percent of the EEC's agricultural exports. The government, however, remains the principal buyer of high-tech products such as military aircraft, nuclear weapons, and nuclear power.

1970-1978: Industrial exports, particularly of cars, chemicals, pharmaceuticals, and aircraft, rise. France also sees an agricultural boom and becomes the world's second agricultural exporter after the United States. The 1975 Lomé Convention formalizes bilateral agreements in which European Community countries extend export concessions to their former colonies.

1979-1982: France's economic crisis does not spare its trade sector. OPEC's price increases and the overthrow of the Shah of Iran drastically reduce France's oil imports from the region. France builds up its nuclear power capacity, but still must import expensive oil from other regions.

1983-1992: Persistent inflation lowers the value of the franc against other major currencies and drives up the price of imports. The trade deficit grows dangerously until 1991. The global economic slowdown leads France to reduce its imports and thus regain a positive trade balance. Trade surpluses continue past the global recession.

1993-1997: The establishment of the European Single Market brings free movement of people, goods, services, and capital across Europe and opens up an area of 376 million consumers to French companies. A new ratification of the GATT includes agriculture, services, and intellectual property, but not cultural materials (such as films), long a controversial issue in France.

1998-2003: France represents 6 percent of world trade. In general, trade policies are determined by European Union agreements and practices. The government investigates ways to promote exports more aggressively, especially to markets in East Asia and Latin America. France continues to extend varying preferential tariff treatment to imports from the African, Caribbean, and Pacific developing countries.

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Money

1919-1925: The franc falls dangerously low in the early '20s. France must pass an austerity package to receive a loan from Morgan Brothers of the United States. Capital problems begin to dictate policies to the government, a phenomenon the left terms "the wall of money." The government aggravates the situation in 1925 when it puts more unbacked money into circulation than is legally permitted.

1926-1929: Capital floods back into France when Prime Minister Poincaré comes to office and moves away from socialism. After his reelection in 1928, Poincaré returns the franc to the gold standard at one-fifth its prewar value, attracting another wave of capital which provides an initial cushion against the Depression. The reevaluation eliminates the state debt to the Bank of France.

1930-1935: France feels the effects of the Depression in 1931 after the U.S. raises a tariff wall against European goods and Hoover announces a yearlong moratorium on German reparations. To preserve a sense of stability, France maintains the gold standard even as others abandon it. Stubborn defense of the franc leads to controversial tax increases, cuts in civil servant wages, and fuel price raises.

1936-1944: A devaluation of 25 percent fails to help the economy as it comes after a wage increase and a concurrent rise in prices. By 1937, gold reserves are low, and the market loses confidence in France. During the war, the Vichy government prints money to meet German demands, thus fueling inflation to 27 percent. Much of this money goes into a growing black market.

1945-1947: An excess of money continues to push prices up until inflation reaches 63 percent. Prime Minister Blum's efforts to control prices put meat and many other goods onto the black market, where prices soar. The purchasing power of the average hourly wage plummets.

1948-1954: Devaluations and $3 billion in aid from the United States help stabilize the economy. France ends its controversial system of fluctuating exchange rates and establishes a single, uniform system of rates. The introduction of the Value-Added Tax (VAT) in 1954 increases government revenue.

1955-1965: A drastic reduction in social expenditure and a tax increase help balance the budget in 1958. Another devaluation and the introduction of a new franc, at a face value of 100 times the old, finally brings stability. At the end of the Algerian War, the new franc settles down to a value around five per U.S. dollar.

1966-1974: The rehabilitated currency and monetary stability mean relatively low inflation until the oil shock of 1973-74. The government's immediate implementation of deflationist measures puts the economy in recession. Inflation rises above 10 percent.

1975-1982: President Giscard d'Estaing and German Chancellor Schmidt negotiate the European Monetary System (EMS), tying several currencies to the deutsche mark and allowing them to fluctuate within agreed limits. France barely maintains the franc within the lower limits. The price of oil soars, the franc is devalued repeatedly, and prices rise by 14 percent per year. The balance of payments deficit triples.

1983-1988: In an economic policy U-turn, the government focuses on the issue of money. Delors orchestrates a devaluation of the franc and convinces Germany to reevaluate the mark at the same time to allow France to stay in the EMS. A combination of these measures, a hike in the petrol tax and transportation fares, budget reductions for state enterprises, and a fall in oil prices strengthens the economy.

1989-1995: French policy is increasingly subordinated to European Economic Community (EEC) requirements. France removes its remaining foreign exchange restrictions. The government attempts to meet reductions in corporate and personal income taxes with reductions spending. The Treaty of European Union commits France and fellow member countries to a process leading to economic and monetary union (EMU).

1996-2003: All efforts are focused on cutting government spending by 2 percent in 1997 in order to qualify for European Monetary Union. The government reduces its fiscal deficit and in 1999 joins 10 other EU countries in adopting the euro as its currency. Monetary policy control switches hands to the European Central Bank. January 2002 sees the euro in public circulation and the retirement of the franc.

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Categories: Overview | Political | Economic | Social | Environmental | Rule of Law | Trade Policy | Money
Graphs: Growth | Income | Inflation | Unemployment | Well-being | Trade Volume | Trade (CAB) | Debt | Spending

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